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February 4, 2008 |
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PROMSVYAZBANK FINANCE: Fitch Puts B- Ratings on Upcoming Loan Fitch Ratings assigned PSB Finance S.A.'s upcoming subordinated notes issue, expected to be of at least US$100 million and due January 2018, expected ratings of Long-term 'B-' and Recovery 'RR6'. The notes will bear interest from 2008 to 2013 at a rate of 12.5% per annum, and from 2013 at the step-up interest rate (unless the notes are redeemed on the step-up date), in each case payable semi-annually. The final ratings of the issue are contingent on the receipt of final documentation conforming materially to information already received. The proceeds are to be used for redeeming the outstanding principal of US$100 million notes (private placement notes issued on July 20, 2007), which finance an existing subordinated loan to Russia-based Promsvyazbank. The terms and conditions of the existing and new notes are principally the same, although the new notes, and therefore the subordinated loan, will carry a fixed interest rate, whereas the original loan and private placement notes carry a floating rate. The Issuer will pay holders of the new notes amounts (principal and interest) received from PSB under the loan agreement. The claims of PSB Finance in relation to the new subordinated loan will be junior to those of all senior creditors of PSB and will rank at least equally between themselves and with the claims of other subordinated creditors of PSB. PSB has the right to repay the subordinated loan should regulatory changes lead to them ceasing to qualify as regulatory Tier 2 capital. PSB is one of the largest Russian privately held banks, and is majority-owned by the Ananiev brothers (84.7%). Commerzbank AG holds 15.3% of voting shares; however, Fitch has been informed that it is not involved in operational or strategic management of the bank. PSB's current customer franchise focuses on large- and mid-sized corporate clients and their workforce, which it serves through a network of over 150 outlets in more than 30 of Russia's largest regions. The bank's current strategic focus envisages further regional diversification and franchise expansion into the retail and SME segments. |
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